Emera Inc. a hold

Jun 20th, 2012 – 1 Comment

With a dividend yield of just over 4% and a relatively mild retreat from the recent high at $35.00 I would be inclined to hold EMA.


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Hi Lou,
Could you offer an opinion on Emera as it appears to be stretching itself a little with it’s buys in the US.

Thanks,

Bruce

 

 

Hey Bruce,

Thanks for the assignment. Emera Inc. (EMA TSX)is a utility with electricity at its core. They generate power and get it to their customers. They also have interests in natural gas pipelines and renewable energy projects. You are concerned about their acquisitions in the United States which I have reviewed and to be honest they do not seem like very large deals or high risk undertakings.

A survey of the charts will provide insight into the case for or against EMA.

 

 

The three- year chart indicates that the shares have enjoyed a nice ride from the March 2009 lows. In fact over the last three years the stock has been creating a series of new highs.

There has been some selling that has come in over the last six weeks. Currently EMA is testing support along the 200 day moving average which is a call to increase surveillance at these levels.

The MACD and the RSI both indicated that there would be a retreat from $35.00 as the stock met resistance.

 

 

 

 

 

The six month chart illustrates the double top that formed in late April and early May. You can also observe the overbought signal generated by the RSI and the turn made by the MACD over the same period.

What is also evident is the support that comes in at $32.50 along the 200- day moving average. The next level of support comes in at $31.00. There is currently no solid indication of a reversal of the downtrend

Finally the two attempts to break above the downtrend line in June of 2012 have met resistance along the 50-day moving average.

With a dividend yield of just over 4% and a relatively mild retreat from the recent high at $35.00 I would be inclined to hold EMA.

Make it a profitable day and happy capitalism!

 

 

 

 

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